The third annual UK Search Engine Marketing Benchmark Report, conducted by Econsultancy in association with our friendly (and very good) rival Guava, has now been published and it has uncovered some interesting facts about the future of Search Marketing.

Firstly, it has revealed that just over half (55%) of companies intend to increase their organic search budgets and just under half (45%) plan to inflate their paid search budgets this year, as they try and increase ROI during these hard economic times.

The report was put together using the statistics gathered from surveying 800 client companies, agencies and search consultants, and shows that companies are choosing, in this recession, to invest in a market with a more measurable ROI and increase their spends on search.

The report also highlighted that nearly half (48%) of the companies surveyed reported better results on organic optimisation campaigns during the year, with just 6% reporting a decrease in effectiveness.

Whilst 43% reported to have more success and better ROI on paid search campaigns, with 15% of the companies surveyed reporting a decline in ROI.

The report also found that companies were now tracking return-on-investment more efficiently, with an increase from 33% to 45% for the companies using paid search and a larger increase from 20% to 35% using organic optimisation.

Respondents were also asked what they felt had had the most negative impact on ROI over the past year and they found that the inflation in click costs to be most damaging, with the causes being an increase in competition and Search Engines trying to make the biggest profit while still delivering ROI.

37% of the companies said that the current recession was negatively effecting ROI and 34% said that lower conversion rates were having a damaging effect, it is safe to assume that these two factors are very closely related.

The report also highlighted that the end of Google’s Best Practice Funding had very little effect on the market, with only 5% of companies seeing a negative effect on ROI.

The figures gathered for the volumes of companies using the different paid search options across the main search engines was quite unsurprising, with 85% using Google Adwords, 44% using Yahoo’s Panama, and 30% using Microsoft Live’s version.

It has shown that Yahoo’s figures have taken the biggest knock with a decrease of 5% in the number of companies choosing to use their paid search platform year on year.

Companies choosing to advertise through mobile search is 5%, which is the same as last year, with just under a quarter (23%) of companies planning to use mobile search this year, 37% reporting that it is not in their plans as yet and 32% having no plans to use the network at all.

Unsurprisingly the report also revealed that the number of companies now investing money in social media has had a large percentage increase, with 65% now choosing to add this form of marketing to the mix.

The increase in respondents using Twitter as a form of marketing has also increased dramatically from a measly 3% a year ago to a staggering 45% today.

A very good piece of research to which we contribute annually – well worth a read.